Austria Employment Guidance

Topics Covered

• Employees - Benefits and Taxes
• Independent Contractors - Benefits and Taxes
• Contracts
• Collective Bargaining Agreements

There are two main worker types organizations may hire:

1. Employees (full and part-time)
   1. Marginally employed persons
2. Independent contractors (freelancers)

Employees

Employees in Austria are characterized by the following:

• Personal dependence
• Economic dependence on the company
• Entitlement to remuneration
• Employees enjoy the complete protection of labor law

The following occupations are considered employees as well:

• White-collar workers
• Blue-collar workers
• Marginally employed workers (monthly income not exceeding the de minimis threshold, which is €485.85 in 2022)
• Apprentices

An employee relationship is a continuing obligation unless it’s a fixed-term employment, in which case, the obligation ends at the end of the specified term.

Required Benefits
According to the Federal Act on General Social Insurance (Allgemeinen Sozialversicherungsgesetz) employees are covered by health, pension, unemployment, and accident insurance. Employees must also register employees to the Austrian Health Insurance (Österreichischen Gesundheitskasse) before commencing work. They are also entitled to sickness and maternity benefits.

Marginally employed persons are covered by accident insurance. However, they are encouraged to get voluntary health insurance and pension, and their contributions are discounted.

Taxes
Employees pay income tax through a salary tax reduction.

Independent Contractors

Independent contractors are characterized by the following:

• Continuing obligation
• Lack of personal dependence
• No obligations to follow specific instructions on “how to do the job”
• Resources are provided by the contracting organization
• Payment of remuneration based on a working time

Benefits
If the independent contractor is registered with the Austrian Health Insurance (Österreichischen Gesundheitskasse), then they must receive notice of employment even without a written contract.

The client must register for accident insurance if the independent contractor earns less than the de minimis threshold (€485.85 per month). If earning above that rate, the independent contractor must get their own health, accident, and pension insurance. They are also required to get unemployment insurance.

An independent contractor has no claims to statutory benefits such as notice periods, holiday pay, or overtime remuneration if there is no specific agreement between the client and the independent contractor. Since contractors are members of the Chambers of Labor, they are entitled to legal assistance and representation offered by the chambers.

Taxes
Independent contractors pay their own income taxes if their income exceeds €11,000, and €12,000 if including other taxable income (pension, employment). They are also required to pay VAT.

Contracts

In Austria, physical employment contracts, agreements, or letters are not mandatory. You can employ a worker via an oral or verbal agreement, but it’s always best practice to have a written physical contract.

Additionally, the type of employment is determined by how the contract terms are handled versus what the contract stipulates.

Here are the different types of contracts, according to the type of employment you’re engaging in:

• Arbeitsvertrag - Employment contract
• Befristeter Arbeitsvertrag - Fixed-term contract
• Freier Dienstvertrag - Freelance contract (independent contractor)

An employment contract must include the following:

• Name and address of the employer
• Name and address of the employee
• The date on which the employment relationship began
• Normal place of work
• Any classification in a general system
• Intended assignment
• Basic salary or wages
• Any additional emoluments (e.g. bonuses)
• Date payable
• Annual leave entitlement
• Contractual normal daily and weekly working hours
• Indication of the collective agreement or works agreement applicable
• Period and term of notice
• Date when the employment relationship is to end (if the employment relationship is for a defined period)

Here are some templates for your convenience, taken from the Austrian and German government sites.

Notice of Employment (Dienstzettel)
The Notice of Employment is sent immediately upon commencement of the employment relationship, even if the contract has not been issued. It details the terms and conditions of your work relationship. You can get a sample template here (note it is in German).

Collective Bargaining Agreements

These are agreed-upon working conditions of employees and are references to certain aspects of one’s employment. These include:

• Remuneration (minimum and actual wages)
• Working hours
• Employment Termination

For employers, the group in charge is the Economic Chamber (Wirtschaftskammer). While on the employees’ side, the Trade Union (Gewerkschaft) is the group in charge.